Melco Crown falls on result, Macau crackdown report

Melco Crown Entertainment, the casino venture of billionaire James Packer and a son of mogul Stanley Ho, said profit was little changed in the fourth quarter, hurt by costs for a Philippines project.

An article in the British newspaper The Times yesterday said the Chinese government was planning a crackdown on junket operators who bring high-rollers to Macau casinos and may also be linked to money-laundering. Gambling stocks, including Melco, fell on the report.

"We haven't heard anything like that," Lawrence Ho, Melco's co-chairman and chief executive officer, said on a conference call today. "We continue to be very positive about this year. I think this year is definitely going to be better than last year." Melco Crown American depositary receipts fell 6.6 per cent to $19.28 at 1:07 p.m. in New York after losing as much as 9.2 per cent intraday. The stock has risen 20 per cent this year in Hong Kong, outperforming Sands China's 6.9 per cent and Galaxy's 8.7 per cent gains. The benchmark Hang Seng Index climbed 2.7 per cent in the period.

Fourth-quarter net income rose to $US108 million from $US107.5 million a year earlier, according to a statement to the Hong Kong Stock Exchange. Revenue increased 9.3 per cent to $US1.1 billion, compared with the $US1.06 billion average of estimates compiled by Bloomberg.

Cotai strip The gain shows Melco's flagship City of Dreams casino and rivals on the city's Cotai strip are drawing mass-market gamblers to the more recently developed part of Macau. Sands China last week reported a 52 per cent jump in quarterly profit, driven by its Sands Cotai Central resort, which opened in April on the strip of reclaimed land.

Galaxy Entertainment is also competing on the strip for China's middle-class gamblers, while higher-stakes gambling, also known as the VIP business, rebounds.

Adjusted property earnings before interest, taxes, depreciation and amortisation, or Ebitda, climbed 6.9 per cent to $US247.5 million, Melco Crown said. That compares with a median estimate of $US250.5 million from six analysts surveyed by Bloomberg News.

Melco last week completed a $US1.4 billion syndicated loan to help finance the planned Studio City project on Macau's Cotai strip. The company also raised $US825 million in a bond sale in November.